Microsoft's Surface demand is 'disappointing,' says analyst

Microsoft's Surface demand is 'disappointing,' says analyst

Summary: If analysts are right, the reason Microsoft is being coy about Surface tablet sales is because they are more subdued than even Microsoft's own conservative predictions.

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Why is Microsoft being so coy about producing numbers regarding how many Surface tablets have been sold since they hit the shelves? According to one analyst, it is because sales have been, "disappointing."

FBR Capital Markets analyst Craig Berger made the comments, who, in a note to clients, went on to say that sales, have "underwhelmed expectations."

Given that Microsoft was only expecting to shift between 3-5 million Surface tablets this quarter in the first place, if Berger is right then even these prosaic expectations were too high.

 

In stark contrast to Microsoft's difficulty in shifting Surface tablets, Apple sold three million iPads in the first weekend alone following the release of the iPad mini and the iPad 4.

According to Bloomberg, other analysts are equally pessimistic regarding Surface sales, with Bob O’Donnell of IDC quoted as saying that: "You can hardly even find one, so even if you wanted to buy it, it would be difficult," and Wes Miller, of Directions on Microsoft saying that, "when Microsoft is stealthy about numbers, that usually means something."

See alsoCheap Windows 8 notebook [Gift Guide 2012]

I have two theories as to why Surface sales are falling short of expectations. The first is that at $599 for the tablet and they keyboard, Surface comes across as too expensive, especially compared to the $499 price tag for the iPad 4, or $329 for the iPad mini. The solution to this problem is simple: Microsoft should drop the price.

After all, if IHS iSuppli is right and the Surface is more profitable than the iPad then there's enough room for Microsoft to do this.

The other factor putting a damper on Surface is the negative press that Windows 8 has and continues to attract, especially the new user interface, which usability experts have slammed it, calling it "confusing," and "disappointing" for "both novice and power users."

It looks like Microsoft is having a hard time making the shift from the PC era of yesteryear into the post-PC era of today.

Image source: Microsoft.

Topics: Windows, Hardware, Microsoft, Tablets, Microsoft Surface

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337 comments
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  • I hope...

    I really want RT to succeed, because I do see low-power ARM like processor architectures as the future of portable computing. I also think that Microsoft has done a pretty good job bridging its conventional Intel based OS with devices that use this new architecture. I am not convinced, however, that surface is the best platform for that OS.

    The problem with surface is that it is bardware that is trying to be an iPad while running an OS that represents something fundamentally different from an iPad: a hybrid of the PC and the iPad that actually works, IMHO.

    I am most excited by the RT convertibles being released by ASUS, Dell and Samsung that blend traditional notebook ergonomics with a detachable tablet screen.

    All said, though, I suspect it will take time before RT truly catches on. For one thing, there is a distinct lack of software avaliable as yet, and for another I don't think folks have quite awoken to the true delight and freedom that actual, no B.S. all day battery life affords the mobile user.
    dsf3g
    • Battery life

      "I don't think folks have quite awoken to the true delight and freedom that actual, no B.S. all day battery life affords the mobile user."

      iPad - 10-11 hours, faster processor, better display
      Surface RT - 8-10 hours

      I think iPad owners get the "true delight."
      gregv2k
      • RT doesn't get 8-10 hrs

        Almost all of the independent test shows that it last about 5-6 hrs max.

        The Pro version is (alleged) to be half of that. So that is not a "true delight" at all.
        wackoae
      • apple religion

        I really strongly dislike apple users for this exact reason.

        The iPad | Surface

        1.4Ghz Dual 1.4Ghz Quad
        1GB RAM 2GB RAM
        16GB HD 32GB HD
        Mono Speaker Stereo speakers
        9Hrs Bat life 8Hrs Bat life

        $499 $499

        You do the math.
        Joe Morphew
    • 'The problem with Surface is that it is BARDWARE'

      Cute. First AKH talks of shifting rather than shipping (slipping, sipping?) thrice, then you come up with 'bardware'.

      The pundits protest too much, methinks. But wittily.
      By indirections we find directions out, surely. But if after such twitter tempests comes great calm, then blow Ballmer, crack your cheeks!

      (Sorry, I couldn't resist.)
      brainout
    • Microsoft has done pretty good jobs

      Not.

      They had great idea -- to create an entirely new Windows runtime, WinRT, modern, clean...
      Then it turned out, that even Microsoft's own programmers can't write Microsoft's own software (MS Office) in WinRT alone. They had to hastily bolt win32 back "for their private use".

      So no, Microsoft has done pretty lousy job in engineering the software architecture of their future - WinRT. Perhaps, in a typical Microsoft style, we will see an service pack to WinRT, that will turn it into something else... Who knows.

      Unfortunately, they were rushing an incomplete product to market. With so much promises.
      danbi
      • Very ignorant.

        Of course Microsoft's programmers can write anything in WinRT, rewriting Office & File Explorer were too massive a job in this timeline alotted. But they will come in 2013.
        MSFTWorshipper
        • Office?

          Microsoft's programmers had a lot of trouble porting Office to dotNet (is it all the way there yet?) from c++, don't look for it on RT any time soon.

          I don't think there's room for 3 major players, so goodbye, Microsoft, Symbian, Blackberry, you were the weakest links. The public voted you off with our feet.
          meski.oz
          • Office, .NET, WinRT, and C++

            @meski.oz: Why would Microsoft port Office to .NET? Microsoft Office is written in C++, they just need to port it from x86 to ARM. Also, Windows Store Apps (for Windows 8 and Windows RT) can be written in C++, JavaScript, or .NET. The Surface is built with an ARM chipset and uses the Windows RT operating system. This allows Microsoft the ability to run two types of applications, Windows Store Apps and Native Apps. On Windows RT, Office 2013 is a Native App in is part of the embedded operating system.
            talbottcrowell
          • No, it doesn't

            To run Office on ARM they would also have to copy the desktop to ARM.

            Unfortunately for them, that is so bloated it won't run.
            jessepollard
          • Office on RT

            I do not work on the Office team @ MS, but my guess is that they did not port it to .NET. My guess is that it is still a native app. That doesn't mean the team had no work to do. They probably focused on porting it to RT by focusing on performance (application and battery). Plus there may be 'OTHER" restrictions to that environment they needed to adhere too.
            Porsche73RS
          • Not comparable

            There might be room for three or even more players if the players were in any way comparable. But Symbian and Blackberry fell behind the development curve and never caught up. And Microsoft decided not even to try to make a tablet to compete with Android and iOS. They had a chance to do so - Windows Phone 7 was well received and they could have built on that. But they chose instead to try their habitual kitchen sink approach - to cram everything in a tablet, both a touch screen and keyboard interface. Problem one is that the first product to market is underpowered and has been oversold. Besides the flashy ads, there have been product placements in popular TV shows. The second problem is the confusing interface only a geek could love. The software shortage may improve in time, if Microsoft can persuade a significant number of developers to build RT apps. The limitations of the ARM processor and the Windows 8/Metro interface may not be solvable.

            The Surface Pro might resolve the problem of processing power, using, as it does, a conventional Intel CPU. And it will run most extant Windows software, so that issue won't even arise for the Pro. But it will still have problems with the interface. And even though it will run like a real PC, the limited storage compared to real PCs may discourage demand. In the meantime, Microsoft's OEMs are rushing Windows 8 PCs to market and may beat Microsoft at its own game. That surprised me because I thought they would sit back and let Microsoft take all the risks of developing a market for this version of the tablet PC. But some of them at least are braver and more ambitious than I expected. And, now that I think of it, they are piggybacking on all the Windows 8 PR Microsoft is paying for. Which may work for them.

            That said, it's too soon to be writing obituaries for the Surface. A rocky start does not necessarily mean disaster. Things could get better. I don't think the RT will succeed, but that's just a guess, not a forecast. And the Surface Pro, when it finally makes it out of the gate, may do all right - though it will have missed the critical holiday buying season. So whatever start it gets is likely to be a slow one. But a slow start doesn't mean failure, either. In truth, we won't know for at least a year whether either the RT or the Pro has become any kind of success - or failure. In the meantime, all this noise about the Surface is just link bate.
            thewhitedog
        • It isn't a question of ability

          It is the fact of the corporate culture of Microsoft that is the hindering factor. I was listening to a podcast a few months ago that was discussing Microsoft's coding products, and because of the corporate culture in Microsoft, the different departments do not like to build on code and compilers built from other departments, because the departments are constantly being pitted against each other. Imagine spending a large amount of resources in developing applications to run in a new run-time or language, only to have that department wiped out next quarter. This leads to the different departments not wanting to create dependencies on other projects within the company.

          So the way it sounds there is very little leadership or direction and just chaos in the departments of Microsoft. It is like throwing stuff at the wall to see what sticks.
          Snooki_smoosh_smoosh
      • danbi, a negative MS comment from you?

        I'm truely shocked! Yet Apple created iWorks for iOS in what, 2010?

        "Microsoft's own programmers can't write Microsoft's own software (MS Office) in WinRT alone"?

        Ok, sure.
        William Farrel
        • Please

          I am curious (professionally), where is the WinRT version of MS Office, Willie?

          Where can I test it?
          danbi
          • First you need to buy a Surface

            Then you need this:
            http://www.neowin.net/news/microsoft-unveils-onenote-for-metro-environment
            toddbottom3
          • You don't need to buy a Surface

            Sorry, you do need to be running either Windows RT (doesn't have to be on the Surface) or you need to be running Windows 8.
            toddbottom3
          • Yes you can use that one app on a Surface

            Or choose from the many thousands of well-reviewed productivity apps available for iPad.

            Those apps are deep into many generations of improvement. Every app being released for Surface is beta.

            You too can be an unpaid beta tester for Microsoft!

            Side note: May want to check the Microsoft user boards under "Skype for Windows RT" to see how that's panning out.
            gregv2k
          • This post is so great coming from you

            ZDNet, make sure you read the fine post by greg near the end of the talkback section where he admits that OS X sucks because all the good apps are only available on Windows.
            toddbottom3
          • Is this the post you mean?

            Microsoft: Dec Qtr Surface Sales Below 1M Units, Analyst Says

            "So here’s the thing about the Microsoft Surface RT tablet, the company’s first entry into the computer hardware market: Almost no one is buying it.

            The Boston-based brokerage firm Detwiler Fenton asserted in a research note this morning that the company is likely to sell less than 1 million units in the December quarter. For the moment, Detwiler says, Microsoft’s tablet strategy would appear to be “in disarray.”

            http://www.forbes.com/sites/ericsavitz/2012/12/04/microsoft-dec-qtr-surface-sales-below-1m-units-analyst-says/
            gregv2k